Best practices are industry-standard methods and procedures that are established as the most effective way to achieve a desired outcome. Consultants evaluate various firms to gather and share these practices.
A measure of the financial soundness of insurance companies, provided by Best's Rating Service, with the top rating being A+. This rating is crucial for buyers of insurance or annuities as it indicates the financial security of the company, and is also vital for investors in insurance stocks.
A measure of the volatility of a share in relation to the overall market. A share with a high beta coefficient is likely to respond to stock market movements by rising or falling in value by more than the market average.
In the USA, betterment refers to the replacement of a major item of plant or machinery by one that will provide better performance, which involves capital expenditure.
Biannual refers to an event occurring twice a year. It is synonymous with semiannual and should not be confused with biennial, which means occurring every two years.
In finance, a bid refers to the price or yield at which a buyer indicates they are willing to purchase a financial obligation. It can also signify an offer by one company to purchase the share capital of another.
In financial markets, the bid and asked prices represent the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept, respectively. The difference between these two prices is known as the spread.
The price at which a market maker is willing to buy shares, usually slightly lower than the market maker's offer price.
Biennial events or occurrences are those that happen every two years, a frequency and timing different from bianual events which happen twice within a single year.
The 'Big Bang' refers to the major changes introduced on the London Stock Exchange (LSE) on 27 October 1986, aimed at deregulating and modernizing market operations.
Big Blue is a well-known nickname for International Business Machines Corporation (IBM). The probable origin of the term was the original 'blue suit' dress code for employees, but now IBM's corporate color is blue, as seen in its logo.
Popular term for the New York Stock Exchange (NYSE), the largest stock exchange in the world by market capitalization.
A big box retailer is a physically large store, typically part of a chain, occupying 50,000-200,000 square feet of single floor space and selling either general merchandise or specialty products. Examples include Walmart, Target, The Home Depot, Lowe's, Best Buy, and Circuit City. These chains often operate nationally and are increasingly expanding internationally.
Large corporations in the United States characterized by having assets totaling billions of dollars, playing a crucial role in the national and global economy.
The 'Big Four' refers to the four largest firms in the world of accountancy and auditing, which include Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers, as well as the major commercial banks in the UK such as Barclays, Lloyds, HSBC, and Royal Bank of Scotland.
Big GAAP refers to the generally accepted accounting principles (GAAP) applied to large entities. It encompasses a comprehensive set of accounting standards used globally to ensure consistency, reliability, and transparency in the financial statements of large corporations.
Big Steel refers to the large U.S. steel producers, most notably exemplified by the USX Corporation (formerly known as U.S. Steel Corporation). These producers are facing intense international competition, mainly from regions such as the Far East.
General Motors, Ford, and Chrysler are collectively known as the Big Three automakers in the United States. Once dominating over 90% of car sales in the country, their market share has significantly declined over the past three decades, particularly in the face of competition from foreign automakers like Honda, Toyota, Hyundai, and Nissan.
Big-ticket items refer to retail products that carry a substantial size and price, often requiring customers to purchase them on credit. These items typically include large appliances and automobiles.
A Bilateral Bank Facility is a loan arrangement made between a single bank and a corporate customer, facilitating a direct relationship between the lender and the borrower. This kind of facility contrasts with a syndicated bank facility, which involves multiple lenders.
A bilateral contract is a mutual agreement in which both parties commit to performing an action or refraining from doing something, creating obligations on both sides. This is a common framework in business, employment, and service agreements.
A bilateral mistake occurs when both parties to a contract are mistaken about the same material fact. This mutual error can result in the contract being voidable, as the actual terms do not align with the parties' expectations.
A method of reducing bank charges in which two related companies offset their receipts and payments with each other, usually monthly, to save on transaction costs and paperwork.
A 'bill' refers to both a bill of exchange and a sales invoice. In accounting, it represents a demand for payment for goods or services provided.
A broker who buys bills of exchange, especially Treasury bills, from traders and sells them to banks and discount houses or holds them to maturity.
A bill of entry is a legal document submitted by the importer or exporter to customs, detailing the nature, quantity, and value of goods being imported or exported.
A bill of exchange is an unconditional written order directed from one person (the drawer) to another (the drawee), mandating the drawee to pay a specified sum of money either on demand or at a future date. This financial instrument is both transferable and negotiable, enabling enforceable monetary transactions.
A bill of lading is a vital document in commercial law serving as a receipt given by a common carrier to a shipper for goods transported. It evidences the contract between the shipper and the carrier and can also serve as a title document, indicating ownership of the goods.
A Bill of Lading is a legal document issued by a carrier to a shipper, detailing the type, quantity, and destination of the goods being carried. It serves as a shipment receipt and is a key part of international trade.
A critical document in construction, detailing the materials, parts, and labor required for a building project. Used by contractors to formulate quotes.
A Bill of Sale is a legal document transferring ownership of goods or property from one party to another. It can serve as security for a debt or as absolute proof of a sale.
The bill rate, also known as the discount rate, is the rate applied in the discount market at which bills of exchange are purchased at a value less than their face value upon maturity. This rate considers the quality and associated risk of the bill being discounted.
An electronic billing system where consumers make payments directly to the biller's website as opposed to using a third-party aggregator or banking site.
The billing cycle is the interval between periodic billings for goods sold or services rendered, normally one month, or a system whereby bills or statements are mailed at periodic intervals in the course of a month in order to distribute the clerical workload evenly.
The term 'billion' has historically had different definitions in the USA and the UK. It once meant one million million (10^12) in the UK and one thousand million (10^9) in the USA. However, it is now almost universally accepted to mean one thousand million (10^9).
Bills payable refers to the amounts a company owes to its creditors for the purchase of goods or services that were bought on credit.
Bills Receivable refers to a category of current assets on a company’s balance sheet, representing promissory notes or bills of exchange held by the company until their maturity.
A bin card, also known as a store card, is used in inventory management to track the receipts, issues, and balances of individual stock items. This card is attached to each bin or storage location to record inventory movement and maintain an accurate balance.
Binary numbers (base-2) are written in a positional number system that uses only two digits—0 and 1. Each digit in a binary number represents a power of 2.
A binder is a written memorandum of the essential terms of a preliminary contract that gives temporary protection while further investigation or formalization of the contract is performed. It is commonly used in insurance and real estate transactions.
Binding arbitration is a method of dispute resolution in which an impartial third party, known as an arbitrator, makes a decision to resolve a conflict after reviewing the evidence and arguments presented by the involved parties. The decision is legally binding and enforceable in courts.
Biological assets are living plants or animals, such as trees in a plantation or orchard, cultivated plants, sheep, and cattle. The term was introduced in International Accounting Standard (IAS) 41, Agriculture, which became operative from January 1, 2003. The rules for the accounting treatment of biological assets are set out in Section 34 of the Financial Reporting Standard applicable in the UK and Republic of Ireland.
A bit, short for binary digit, is the smallest unit of data in a computer and represents a binary value of 0 or 1.
Bitcoin is a decentralized digital currency introduced in 2009, often utilized as a medium of exchange and a store of value. Unlike traditional currencies, it is not backed by any government or financial institution and can be 'mined' using specialized software. Transactions are recorded in a public ledger with anonymized identities, leading to debates over its potential use in illegal activities.
Bits per second (BPS) is a measure of data transmission speed in digital communication systems, indicating how many bits of data are conveyed per second.
A biweekly loan is a mortgage that requires principal and interest payments at two-week intervals. Each payment is exactly half of what a monthly payment would be. Over a year's time, the 26 payments are equivalent to 13 monthly payments, leading to faster amortization than a standard monthly payment mortgage.
In computing terminology, a 'Black Box' frequently refers to the Central Processing Unit (CPU), or any device that delivers answers to complex problems without revealing the inner working or processes involved.
Black Friday originally referred to September 24, 1869, when an attempt to corner the gold market led to a financial panic and depression. Today, it broadly denotes any significant drop in financial markets.
A person or firm that makes an unwelcome takeover bid for a company, often hostile and unsolicited.
An illegal market for a particular good or service, typically emerging when regulations or restrictions are imposed, leading to unregulated and often secret transactions.
Black Monday refers to the stock market crash on October 19, 1987, when the Dow Jones Industrial Average (DJIA) plummeted 508 points, or 22.6%—the largest single-day percentage decline in history.
In risk management, a 'black swan' is a high-impact event that should not be regarded as impossible just because it is highly improbable. These events can disrupt markets and systems and are categorized by their extreme rarity, severe impact, and predictability in hindsight.
Black-Box Accounting refers to financial statements based on complex accounting methodologies that, while accurate and legal, obfuscate rather than clarify financial data. Techniques such as restatements of revenues, inventory, earnings, and the use of derivatives and off-the-books partnerships can be involved.
The Black-Scholes Option Pricing Model, developed by Fischer Black and Myron Scholes, is a mathematical model used to determine the fair value of options by incorporating factors such as volatility, interest rates, stock prices, exercise prices, and time until expiration.
The BlackBerry is an electronic device made by Research In Motion (RIM) that combines standard personal digital assistant (PDA) features with wireless communication capabilities, enabling users to send and receive emails, access the internet, and use various applications on-the-go.
Originally lists prepared by merchants containing the names of those who went bankrupt, the term blacklist today refers to the practice of excluding individuals from employment or other opportunities for various reasons.
A blank bill refers to a bill of exchange where the name of the payee is left blank. It allows the holder of the bill to fill in the name of the payee at a later date or upon presenting the bill for payment.
A blank cheque is a negotiable instrument with the amount left unspecified by the drawer. It can be used when the drawer wishes to permit the bearer to fill in the amount of money they choose up to an authorized limit.
A share transfer form in which the name of the transferee and the transfer date are left blank. The form is signed by the registered holder of the shares so that the holder of the blank transfer has only to fill in the missing details to become the registered owner of the shares. Blank transfers can be deposited with a bank, when shares are being used as a security for a loan. A blank transfer can also be used when shares are held by nominees with the beneficial owner holding the blank transfer.
A Blanket Fidelity Bond is an insurance policy that protects businesses from losses caused by fraudulent acts committed by employees.
Blanket insurance is a single policy that covers multiple kinds or locations of property, providing comprehensive coverage ideal for businesses with assets spread across different locations.
A health insurance policy providing broad coverage for an insured's medical expenses, except those explicitly excluded. This type of policy is highly advantageous for insured individuals as any non-excluded medical expenses are automatically covered.
A blanket mortgage is a loan that covers more than one parcel of real estate. This type of mortgage is commonly used by developers who seek financing for a large tract of land that they plan to subdivide and sell without retiring the entire mortgage.
A production overhead absorption rate used uniformly across a factory, often serving as an alternative to calculating a rate for each individual cost centre.
The term 'bleed' in a legal and financial context refers to the act of extracting an excessive amount of money or other valuable assets from a person, typically through threats or intimidation, making it a type of extortion.
An unethical practice in real estate development and property management where project costs are manipulated for excessive profit or property value is compromised for immediate income.
The blended rate refers to the time- and rate-weighted effective billing rate, interest rate, or tax rate, providing an average rate that incorporates varying rates and applied durations.
The Blended Value refers to the average value of tendered stock and residual stock in a self-tender offer. It provides a sense of the overall valuation effectiveness of such tenders.
A blighted area is a section of a city characterized by dilapidated structures and substandard living conditions. Urban renewal initiatives are designed to address these areas by rehabilitating or demolishing buildings that don't meet housing codes, and by constructing new buildings.
A blind copy or Bcc is a copy of a letter or email sent to a person without the indication on the original communication that a copy has been sent. It helps preserve privacy by keeping email addresses hidden from other recipients.
A limited partnership investment vehicle where properties or specific investments are not disclosed upfront, relying on the promoter's track record for investor evaluation.
A blind trust is a financial arrangement in which a person in public office or high-ranking position places their private financial affairs under the management of an independent trustee, who manages the assets without communicating details to the beneficial owner to prevent conflicts of interest.
Blister packaging is a method used for packaging items in a clear plastic envelope or window, enabling customers to view the contents prior to purchase.
A block refers to a large quantity of stock or a large dollar amount of bonds held or traded, typically defined as 10,000 shares or more of stock or $200,000 or more worth of bonds.
A block grant is a large sum of money granted by the national government to a regional government with only general provisions on how it is to be spent. States have broader discretion in how they use the funds.
In data or word processing, a block move operation involves moving a section of a file from one place to another within the same file. This can include the transfer of words, sentences, paragraphs, or several pages in a document. The section to be moved is typically identified and highlighted before the operation.
Block Sampling is a judgment sampling method in which accounts or items are chosen in a sequential order. After the initial item in the block is selected, the balance of the block is automatically chosen.
Blockage discount refers to a reduction from the fair market value of a decedent's block of inventory for the purpose of determining the valuation of an estate.
A term used to describe broadcast programs or feature movies that achieve extraordinary success, drawing much larger audiences and higher-than-expected ratings.
Blockbusting is a racially discriminatory and illegal practice wherein a party coerces a homeowner to sell their property to someone of a minority race or ethnic background, and then uses scare tactics to cause other homeowners in the neighborhood to sell at depressed prices.
Blocked funds are finances that cannot be transferred out of a country due to exchange controls or similar restrictions, often imposed by governments to manage the flow of currencies.
A blog, short for 'web log', is an online journal or newsletter that is frequently updated and intended for public consumption. Blogs are typically presented in reverse chronological order and can be easily published using various software platforms.
Bloomberg LP is a major business and financial news broadcaster, offering various services including interactive TV, telephone news services, a personal finance magazine, books, and radio and television broadcasts.
A blowout refers to the rapid sale of items or securities at very low prices in merchandising and securities markets. In the context of merchandising, it typically involves retail items sold quickly at steep discounts, whereas, in securities, it entails the rapid, complete sale of a new offering of shares.
Colloquial name for any of the ordinary shares in the most highly regarded companies traded on a stock market. Blue-chip companies have a well-known name, a good growth record, and large assets.
State or local laws prohibiting certain businesses from operating on specific days, usually Sundays. While these laws have been abolished in many places, they originally aimed to encourage rest and religious observance.
Blue Shield is an independent, nonprofit, membership-based insurance plan that offers benefits covering expenses associated with medical and surgical procedures.
A blue-chip stock represents a national company renowned for its robust profit growth, consistent dividend payments, quality management, and top-tier products and services. The term 'blue-chip' is derived from the color of the most valuable gambling tokens.
A term used to describe employees performing manual labor, often requiring a work uniform, which may be blue in color. Blue-collar workers range from unskilled to skilled employees and are subject to wage and hour laws, including overtime pay for working more than 40 hours per week.
In the USA, Blue-Sky Laws provide for state regulation and supervision of issuing investment securities within that state. They cover broker licensing and the registration of new issues to protect investors from fraudulent activities.
A blueprint typically refers to a photographic print where lines and solid shapes are rendered in white on specially prepared blue paper. It is also a term used to describe a detailed plan or outline guiding the execution of a project or action.
A technical industry standard for seamless low-power, short-range wireless communication of data and voice between electronic devices such as mobile phones, computers (including hand-helds), PDAs, printers, and others.
A unit of measurement for lumber, defined as one foot wide, one foot long, and one inch thick, or 144 cubic inches.
The Board for Actuarial Standards (BAS) is the UK body responsible for setting technical standards for actuarial work to ensure high-quality practices and reliable financial predictions.
The Board for Actuarial Standards (BAS) is an organization established in 2005, with the remit to set technical standards for the actuarial profession as part of the Financial Reporting Council.
A Board of Directors is a group of individuals elected by the stockholders of a company to set corporate policies and appoint the chief executives and operating officers. They meet several times a year and are compensated for their services.
A government entity whose purpose is to ensure uniform property tax assessments. It operates at both local and state levels to review and assure fair assessments.
The seven-member managing body of the Federal Reserve System, commonly called the Federal Reserve Board, which sets policy on banking regulations and the money supply.
A local group of real estate licensees who are members of the state and national associations of REALTORS®.
A boardroom refers to both a space within a business setting where its board of directors holds meetings and, in the context of stockbrokers, refers to an office where registered representatives work.
